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GST Bill: What next?
On 3rd August, 2016, the Constitution (122nd Amendment) Bill, 2014 has been finally approved by the Rajya Sabha. The Bill was passed with 203 votes in favour and none against, after a seven-hour ritual debate in the Upper House of Indian Parliament.

All six amendments including scrapping of 1% additional tax, as moved by Modi led NDA Government were duly approved with 100% votes. Interestingly, during 'clause by clause voting' the results showed different numbers every-time.

However, the Bill was finally passed as amended with 203 in favour, none against. As a notable exception, the AIADMK from Tamil Nadu was the only political party to oppose the Bill and all its members staged a formal walkout ahead of voting.

With the passage of the Bill by the Rajya Sabha, everything is not complete. There is still a long way to go ahead to decide the final fate of the so-called GST regime in India. In fact, approval of the Upper House is just one of the many hurdles in the process. The Bill will now go to Lok Sabha (Lower House) once again where the amendments made in the Upper House will be debated.

In other words, even after the Bill has been passed by the Rajya Sabha there are still a number of hurdles in its final implementation. The Bill has to be tabled in each state legislature, debated and passed with the requisite number of votes. No doubt, it is not an easy task in a federal legislative structure like India.

The first and foremost hurdle before the proposed GST roll out is its passage by at least half of the state legislatures in the country. In this context, at least 15 state assemblies must pass the Bill after its passage in Parliament. Subsequently, the Bill will have to be presented to the President under Article 368 of the Constitution for his assent. All these do require great strength and abnormal effort from the legislators both at the Centre as well as the States.

Legally speaking, a Constitution Amendment Bill in India simply allows the Centre to amend the Constitution. In this context, the second notable hurdle emerges. Accordingly, all 29 States and two legislative Union Territories in India will be required to enact the State and Central GST Bills in their legislative assemblies post recommendation from the GST council.

Any delay in passing the State Bills by these State Assemblies will simply slow down the entire progress of the GST roll out. On the legal front, there cannot be a piecemeal implementation of GST legislation. In this scenario, the rolling out of GST in India will mainly depend on its time-bound and smooth implementation by various power centers both at the Centre and State levels. This will prove again a Himalayan task.

The third major problem is the formation and the operation of the GST council. This council is currently tasked by draft legislation to formulate the rules, tax rates, exemptions etc. The working pattern of the GST council requires the complete concurrence of at least three-fourths of the states with the Central Government to implement the law. It is not again an easy task as thought to be. 

Once the guidelines are passed by the GST council, the states have to take up the law and pass their individual legislation to implement the framework. In this context, another big question arises: How smoothly this 'state level concurrence' will be achieved towards GST?

At present 1st April 2017 is the date set by the government for introduction of the GST Act. In this context, the fourth notable problem arises in respect of practical implementation. No doubt, India is a country well known for its excessive practices of red-tapism or red-tapery. In this complex milieu, all formalities and procedures related to actual implementation of GST cannot be concluded by April 2017. In this hanging scenario, the earlier roll-out of GST law in India still seems to be a grand illusion amidst the acrimonious Indian politics and politicians.

(Mr V S Vadivel FCA ACS is an eminent Chartered Accountant, notable author, socio-economic thinker and unique academician from India).

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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